Thursday, July 24, 2014

Now that we have a sense of Beane’s performance and how much it would cost to replicate it, let’s turn back to the Boston Red Sox and their failure to sign him (or even to offer him anywhere near his worth)....

But some of that money was spent and some of those wins came before the Red Sox attempted to hire Beane. To be conservative, let’s just look at the period since Henry made Beane his offer: In the last 12 years, the Red Sox spent $1.714 billion on payroll, while the A’s spent $736 million. We can then break down what it could have looked like if Beane had worked for the Red Sox like so:

Let’s say it would have cost Boston the same $736 million that it cost Oakland to get the A’s performance with Beane.
At the hypothetical $25 million-per-year salary I suggested earlier, Beane would have cost the Red Sox another $300 million. (It’s possible that Beane would have wanted more, but it’s even more possible that they could have gotten him for less.)
The difference in performance between the A’s and the Red Sox over that period (where the Sox were as successful as at any point in the franchise’s history, and the A’s were supposedly stagnating after Beane’s early success) has been about 50 games for Boston. Since we don’t know exactly how good Beane would be at procuring additional wins above his Oakland performance, let’s assume that the Red Sox would have had to pay the typical amount teams have paid for wins in the period to make up the difference. According to the year-by-year price of wins from my calculations above, those 50 wins (taking when they happened into account) would have a market value of about $370 million (though this might have been lower with Beane in charge).

If we combine these — the price of the A’s performance ($736 million) plus Super-Expensive-Billy-Beane’s salary ($300 million) plus the additional 50 Red Sox wins at high market estimates ($370 million) – merely duplicating their previous level of success still would have saved the Red Sox more than $300 million relative to what they actually spent, and that’s with reasonably conservative assumptions. That’s money they could have pocketed, or spent making themselves even better.

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12 wins per year better than what you'd expect based on payroll. That's pretty good, but to get that average over a long period of time you absolutely need a low payroll. Pay for 90 wins and it's going to be impossible, over time, to average 100+ wins.

A big part of that is that Beane can adjust quickly when things are not working out. If he makes some mistakes (plenty in the 2007-2011 period) it's a short term mistake, and he generally didn't even wait until next season to try another plan. Keep going until something works. Once you get into the 125-150 million or more in payroll, you lose that flexibility. You have to live through your mistakes, or take the Yankee route and just keep bringing in expensive players while making the previous mistakes into 10 million dollar backups.

Which can still get your team wins, but you won't have a chance at the wins per dollar spent metrics.

Boston did a pretty good job of reversing course a few years back when they got the Dodgers to take Crawford, Beckett, and Gonzalez. That's a rare example of a team successfully shedding a ton of longterm salary commitments after determining that they had made a huge mistake shortly after inking the contracts.

I am as big a fan of Beane's work as anyone. I only wish the Padres front office could do so well putting winning rosters together on a shoestring budget.

That being said, the Red Sox have won 3 World Series in the last decade. It's not like they have just been foolishly throwing money around the whole time with nothing to show for it. They've got some people who know a bit about how to construct a successful team, too.

@3 That was a once in a lifetime perfect storm though. How often do you see a team in a position to unload 3 useful but vastly overpaid players come around exactly when another team is making the transition from mid-market to Yankees level that happens to have needs at the 3 positions team a is trying to unload. It was a great move, but I don't know if I'd attribute much to the Red Sox on account of it.

Without reading the piece yet, this strikes me as so full of hypotheticals so as to be of limited value.

An extreme example of what makes all this so tough to do, even using broad parameters:

Mike Trout was the 25th pick of the 2009 draft. Over 20 teams had a chance to take Trout, but did not (a few teams, like Arizona and Washington, had two chances, but did not). If you are the GM who took Trout instead of anybody ahead of him (even Strasburg), you added a few hundred million dollars worth of value to your franchise over the first 10 years of Trout's career. Just the fact that Trout will make a total of maybe $2 million in 2012-2014 to produce about 30 WAR - no matter how much he makes over the next 10 years - forces any evaluation of GM Tony Reagins, for example, to come out as a net positive.

There are too many "little" moments like that, which end up being big moments years later, that you just can't assume Beane (or anybody else) would have gotten something right.

Just the fact that Trout will make a total of maybe $2 million in 2012-2014 to produce about 30 WAR - no matter how much he makes over the next 10 years - forces any evaluation of GM Tony Reagins, for example, to come out as a net positive.

I give more of the credit to Eddie Bane. After the draft the netted not only a Trout, but Garrett Richards, Tyler Skaggs, and Pat Corbin, Tony Reagins said he didn't like his last couple of drafts and fired him.

Then again, we don't know the full story of who did what. And with Reagins himself, his signature horrible move was the Wells trade. I don't know how much he personally wanted to do that. I have seen it reported that Arte Moreno told him to either make the trade or get fired.

@1 I am just guessing here but I think that the problem is that the $/win should not be linear, because of the boundary effect.

Or perhaps what you are getting at -- given that signing ANY free agent is very likely to net you negative "value" (in wins/$) then over time, by simply only paying players through arbitration-eligible years is the only way to be good at this metric. Almost all of the marginal win/$ comes from these guys. So if you have average scouting and never pay market value for anyone you should come out ahead.

However - look at the difference between the As and the Giants in terms of franchise value, revenue, and attendance. The Giants have been quite successful in win% (not as good as the As') since 2000 but have always had average, or slightly above average payrolls. Because they "invest" money in keeping their known popular players around.

Wasn't there a postscript chapter in Moneyball about what Beane planned to do with the Red Sox? I remember it being pretty awful. One of them was definitely that he planned on dumping Jason Varitek and replacing him with some crappy backup catcher. Can't remember who, though.

"In his mind's eye he had traded Red Sox third baseman Shea Hilenbrand to some team that didn't understand that a .293 batting average was a blow to the offense when it came attached to a .330 on-base percentage. He'd signed Edgardo Alfonzo to play second base, and Bill Mueller to play third. Red Sox catcher Jason Varitek was gone and White Sox backup Mark Johnson was in his place. Manny Ramirez's glove was requisitioned by general management, and the slugger would spend the rest of his Red Sox career as a designated hitter. All in his mind's eye."

When you google "Mark Johnson" you get a film producer, a linguist, a hockey coach and a chemist. Also a banjo player. I had some local results too, a contractor and a LinkedIn account. If, like I did, you then google "Mark Johnson baseball" the first result is ... the former coach of Texas A&M. But there I see the Baseball Reference link! Except it's for the other Mark Johnson, the lumbering Pirates first baseman.

I did, at last, find the real Mark Johnson. He took enough walks to be the Frank Menechino of catchers. But worse.

Yeah, Beane acquired Johnson at one point. This is apparently one of those few areas where video games don't mirror real life! Given backup Cs can't hit anyway then, assuming decent defense, you'd think one who reaches base a reasonable amount would be a pretty good one to have. Johnson didn't hit but did have "seasons" with the White Sox with OBPs of 344 and 338 -- gold by backup C standards.

Was it OOTP or the other GM game where Adam Melhuse (2005ish?) was a near All-Star thanks to brilliant defense and a ridiculous OBP. First thing I always did was trade for Melhuse -- you got him cheap, he'd sign cheap, and he'd put up a 370 OBP with Yadier's glove.

Whatever underpayment there is likely goes all the way down the line -- it's not that Beane is worth $25-60 M, it's that Beane's team is worth that much with Beane deserving the biggest paycheck but not all of it.

Haven't read the article but, along the lines of AROM, it's something of a zero-sum game. I assume the $60 M estimate is about wins above payroll. Fine, let's call that 10 ... but if the A's spend $60 M on Beane then that's gotta come out of payroll and now he's working with nothing but min wage players. They might still win 60 a year rather than 48 but that's about it ... and the fans will stop showing up and now he's not generating an extra $60 M of revenue, etc. Or, per AROM, if he goes to the Sox, it's pretty much impossible that his marginal value could be another 10 wins ... or, he is, but the Sox also take the $60 M they're paying him away from the payroll and they end up spending the same amount of $ for the same number of wins.

Whatever underpayment there is likely goes all the way down the line -- it's not that Beane is worth $25-60 M, it's that Beane's team is worth that much with Beane deserving the biggest paycheck but not all of it.

Concur.

MLB pretty clearly undervalues off the field talent. I mean, a personnel strategy of "let's hire whoever's willing to work 80 hours a week for $25K" is unlikely to maximize your human resources.